Business strategy

Amazon Cuts Staff by About 1 Lakh Employees; Its Largest Sequential Drop Ever

Amazon has cut its staff by about 1 lakh employees, which is the largest sequential drop in its history. The reduction has been made mainly at its fulfillment centres and in the distribution network. The e-commerce company still employs more than 15 lakh persons.

During its quarterly earnings call on Thursday (July 28), Brian Olsavsky, chief financial officer of Amazon, said, “I think it’s right for people to step back and question their hiring plans. We’re doing that, as well. I don’t think you’ll see us hiring at the same pace we did over the last year, or the last few years.”

He added that in the previous year, Amazon had reduced its net headcount by 27,000. “So, we’re pretty transparent about the fact that we had hired a lot of people in Q1 for the coverage of the omicron variant.”

Olsavsky also said the company added 14,000 workers in the first quarter of this year.

Google is also getting slow on hiring. This month, its Chief Executive Officer Sundar Pichai told employees: “Like all companies, we’re not immune to economic headwinds… The hiring pause is part of that slowdown to enable teams to prioritise their roles and hiring plans for the rest of the year.” It had nearly 164,000 employees at the end of March, adding 10,000 employees in the second quarter.

Ola is also reportedly in the process of laying off about 1,000 employees. However, it is aggressively hiring for its electric mobility business. The process has been ongoing across verticals including mobility, hyperlocal, fintech, and its used cars businesses. Those targeted for layoffs have been asked to resign voluntarily, according to an ET report. The firm is delaying the appraisal process of some employees who it wants to fire, so that they resign.

Amazon reported a loss of $3.84 billion, or $7.56 a share, for the first quarter of the year. A year ago, it reported a profit of $8.1 billion, or $15.79 a share, for the first quarter.

Financial stress has forced start-ups in India to resort to lay-offs for cutting costs. Last week, edtech unicorn start-up Byju’s laid off over 600 employees, including both permanent and contractual.

Before Byju’s, new-generation enterprises including Vedantu, Unacademy and Cars24 have also let go of over 5,000 employees in India this year. Ola has laid off about 2,100 employees during January-March this year, followed by Unacademy (over 600), Cars24 (600) and Vedantu (400). This apart, e-commerce firm Meesho has laid off 150 employees, furniture rental start-up Furlenco 200, influencer-led social commerce start-up Trell 300 employees and OkCredit has let go of 40 employees.

Video streaming platform Netflix also began scaling back some marketing initiatives in April, then cut 150 employees in May and 300 in June. In the last quarter, it reported $70 million in expenses from severance and shed an additional 970,000 subscribers. Netflix had 11,300 employees in 2021.

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